Some Rimi stores have put up signs in their dairy sections informing customers that milk sold in plastic bags is temporarily unavailable due to supply problems. Two companies produce bagged milk in Estonia: Valio and Maag Food, the latter of which sells it under the Farmi brand.

Valio CEO Maido Solovjov said the supply problems were caused by its competitor Maag Food.

"We can see that our competitor is not supplying certain customers and has significantly reduced its production of bagged milk — for reasons I don't know. As a result, the number of orders for bagged milk we receive has increased significantly," Solovjov said, adding that Valio cannot meet such a rapid increase in demand without making additional investments.

"Machines have their limits. For the past two or three weeks, our plant in Laeva has been operating not just at 100 percent capacity, but beyond it," Solovjov said.

According to Solovjov, the competitor began cutting production of bagged milk about two weeks ago when retail chains started contacting Valio about supply problems.

In response to an ERR inquiry, Maag Food communications manager Kerstin Musting said the amount of raw milk the company normally purchases from farmers has fallen noticeably this fall due to the transition to feed made from the new harvest.

What happens next?

According to Solovjov, bagged milk is unlikely to disappear from Estonia.

"The next quarter will probably show what happens to bagged milk. I believe it will remain on the market here in some form."

Bagged milk has been very cheap in Estonia for years. Could supply problems now drive up its price?

"That could certainly have an impact and probably will. Retail chains themselves have generally kept the price low and have often sold it at a loss because it has been an attractive product for drawing customers into stores," Solovjov said.

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